Looking for Trouble: Will Lawmakers Beef Up Drilling Inspections?

NPR | Dave Fehling

Chances may be better this time around that the Texas legislature might actually strengthen regulation of oil and gas drilling by the Texas Railroad Commission.

“I think there’s more and more consensus on what needs to happen at the Railroad Commission,” says Royce Poinsett. He’s a lawyer with Baker Botts and a lobbyist for the oil and gas industry.

Part of the reason is oil and gas drilling is getting far more public scrutiny. There’s even a Matt Damon movie now bringing attention to the hydraulic fracturing technique that’s behind a massive surge in oil and gas drilling.

“Aside from perhaps higher penalties, I think what everyone agrees is that the Railroad Commission is simply not given enough resources. It’s been underfunded for decades,” Poinsett told StateImpact.

How Many Inspectors is Enough?

Since 2003, the number of wells monitored by the Texas Railroad Commission (RRC) increased by 42,000 to a total statewide of nearly 400,000 active and inactive wells.

To monitor all those wells, the RRC says it has 97 full time oil and gas inspectors plus 55 additional staff to help out.

But despite the12 percent increase in total wells to be monitored, the number of inspections performed was up only 3 percent (comparing 2003 with 2012) according to data in the RRC’S “Strategic Plan.”

Does this mean the RRC inspections are not keeping up?

No, according to Ramona Nye, a spokesperson for the RRC.

“A growth in drilling activity does not necessarily correlate to a corresponding increase in violations. In fact, our inspectors have been witnessing increased compliance by operators,” wrote Nye in an email to StateImpact.

How Texas Compares

“We thought we’d actually see fewer inspections in Texas than the other states. It turned out to be the opposite,” says Bruce Baizel, an attorney with the environmental watchdog group Earthworks.

Baizel says the group compared inspection data and found Texas was annually checking 51 percent of wells whereas Pennsylvania and Ohio inspected only about 10 percent.

But Baizel says it’s not simply a question of how many wells inspectors check. It’s what happens if they find something wrong. He said Texas stood out for how little it fined violators.

“What you find, particularly in Texas, is the penalties that can be imposed by the state agency are very low, on average it’s about a thousand bucks per penalty,” Baizel told StateImpact. “So if you’ve got a well that’s generating $5 million dollars on average, a $1000 is really a drop in the bucket.”

The RRC’s ‘Unwillingness to Pursue Enforcement’

Another report critical of the RRC’s enforcement of drilling laws comes from right in Austin. The Sunset Advisory Commission, a legislative oversight office that critiques state agencies, found that the RRC brought cases against so few drillers that it was contributing “to a public perception of an unwillingness to pursue enforcement action.”

The RRC has responded to the criticism. In recent months, it has increased penalties and fees. Feedback from RRC staff members indicates the moves have already “raised awareness” among operators, especially smaller companies, that breaking the law will cost them, according to Ramona Nye, the RRC spokesperson.

Texas lawmakers will likely take up the proposals from the Sunset Advisory Commission when their new session begins in January. Previous efforts to beef up the RRC failed in past legislative sessions.